Director positive over Shannon’s future

Shannon Airport is setting a new course to move out of the Ryanair era, even though it will mean a setback to passenger throughput, which will fall this year for the second year in succession.

That was the clear message from airport director Martin Moroney when he delivered a review of the first 10 months of what he described as “a tough” 2009 and an outline of future prospects to the November meeting of the Mid-West Regional Authority.
Battling against the adverse factors of the open skies drift towards Dublin and general weakening in the airline business, Shannon’s US traffic was down by a substantial 22% up to the end of October. The word was not as severe, but negative nevertheless, on the east-bound services to the UK and Europe that have propped up Shannon traffic to record levels up to 2007. But January to October traffic figures show UK numbers down 7% and passenger volumes on European routes falling by 10%.
Overall, Shannon in the first 10 months of the year recorded a 12% decrease in terminal passenger traffic which, when combined with a slight increase in transit movements, translated into a 10% downturn. By November 1, Shannon passenger traffic for the year had reached 2.6 million, compared to 2.9 million at the same time last year.
In the immediate future, things are not going to get much better.  Shannon is facing into a downturn that will also be a difficult time for airlines, the airport director acknowledged. Nevertheless, he added, “Shannon has got a future but there is a lot to be done.”
The most pressing task for the airport management is to deal with and find replacements for the Ryanair services, which the low-cost airline has announced it will pull out come March of 2010. But in anticipation of what he described as the “very likely” carrying out of the Ryanair threat to withdraw 70% of its services, Shannon has been in what he described as “deep discussions” with other airlines.
“We are confident that another airline will be flying from Shannon next year,” the director said. “We are also confident that Shannon will see other new airlines in Shannon over the next two to three years.”
As he was briefing the regional authority members on Wednesday of last week, when Aer Lingus was in talks with unions on the airline’s latest survival plan, Mr Moroney did not want to disclose any aspect of Aer Lingus’ plans or prospects at Shannon. But in a question and answer session, he did confirm that Aer Lingus was looking at the possibility of keeping its Shannon-New York flight operating through the loss-making low season by introducing a smaller aircraft and moving the flight to the earlier departure time that is favoured by regional business interests.
“Disappointment on the double,” was the airport director’s verdict on the final phase of the five-year agreement with Ryanair, which expires next April.
“Ryanair did not deliver,” Mr Moroney said. And when the low-cost airline did deliver, what was delivered was not what the airport management and board had envisaged.
When the deal was set up, the Ryanair commitment was to deliver two million passengers a year to Shannon. That held up for the first four years, with Ryanair coming in on target or close to target. But this year, “we will be doing well to bring in 1.2 million”, he said.
Mr Moroney said that when the Ryanair deal was negotiated, “a very low level of charges” was included as an incentive to the airline to build up traffic into Shannon.
While Ryanair were paying Shannon almost nothing, Mr Moroney acknowledged that the passenger figures generated were not up to expectation. While the deal had been done with hopes that 70% of the traffic would be incoming tourists, it turned out that 70% of the passengers were outbound and were predominantly “Irish people or Polish people”.
When it came to negotiation of a new deal with the low-cost airline “Ryanair demanded a reduction of the very low level of charges to almost nothing” and took a hard line with Shannon. The Ryanair attitude, Mr Moroney said, was one of, “This is what we want. Give it to us or else”.
While accepting that Ryanair indicated it would maintain in Shannon but that from next April it would reduce passenger volumes to 600,000, the director made it clear that the low-cost airline would not be getting the preferential treatment on charges. Indicating that Ryanair would continue to operate links to the second-string London airports of Gatwick and Stansted and also to Malaga, Mr Moroney commented, “We will welcome these services but it will be with proper charges.”
In stressing that Shannon has to run on commercial lines, Mr Moroney explained that competition rules and regulations would require the airport to extend to other airlines the same level of charges as those applying to Ryanair.
With the Ryanair withdrawal in mind, the airport is also reverting back to the tour operators and charter flight operations that brought tourists from Germany and France through Shannon in the pre-Ryanair era. While the charters were seasonal in the past, Mr Moroney said, “We are now looking at how we can restore tour operators and charters as a key part of our business.”
“With the aim of making Shannon sustainably profitable, we are looking at new ways of generating revenues,” Mr Moroney said.
Significant new streams of airport income would also flow from the US Customs and Border Protection pre-inspection station, which came into operation in mid-2009, but Shannon is still awaiting delivery of the two elements of the CBP that can generate substantial airport income.
Protocols for pre-inspection of executive aircraft, which would be a major attraction to the substantial number of smaller jets that cross the Atlantic, is still awaiting clearance “but should come on stream in a couple of months”, Mr Moroney added.